Usha Martin (NSE:USHAMART) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to earning conference call of Usha Martin Limited. As a reminder, all participant line will be in the listen only mode, and there will be an opportunity for you to ask question after the presentation conclude. Please note that this conference is being recorded. I now hand the conference over to Mr. Dev Rishi Singh from CDL India. Thank you, and over to you, sir. Good morning, everyone, and thank you for joining us on Usha Martin Q1 FY twenty seven earnings conference call. We have with us Mr. Rajiv Jawar, Managing Director of the company Mr. Abhijit Paul, chief financial officer and Ms. Shreya Jawar, director of the company.

0:51 We hope all of you have had the opportunity to refer to the earnings documents that we shared with you earlier. We will initiate the call with opening remarks from the management, following which we will open the forum for Q and A session. Before we begin, I would like to point out that some statements made in today's call may be forward looking in nature, and a disclaimer to this effect has been included in the earnings presentation. I would now like to invite Ms. Shreya Jawar to make her opening remarks. Thank you, and over to you. Morning, everyone, and thank you for joining us for Usha Martin's earnings conference call for the first quarter of FY 'twenty seven.

1:37 I will begin with a brief overview of our performance and the key business developments during the quarter, following which our CFO, Mr. Abhijit Paul, will take you through the financials in greater detail. We have made a strong start to FY 'twenty seven. Consolidated revenue increased by 16% year on year to INR $10.33 crores. Operating EBITDA stood at INR $20.08 crores, a 44% increase year on year with an EBITDA margin of 20.1%. What is particularly encouraging is the quality of this growth. Across our businesses, value grew faster than volume, reflecting improved realizations and our continued shift towards specialized products.

2:24 You will see this trend through each of the verticals I now take you through. Starting with wire ropes, Value growth was strong at 18% year on year even as overall volumes were marginally lower. I want to highlight that the volume decline was largely due to the Middle East operation. Across our other key markets, India, The U. S. And Europe, we saw healthy volume growth and our geographic diversification helped the overall Globe business remain robust. In the domestic market, Globe volumes grew approximately 12% year on year, while value grew around 21%, supported by healthy demand across train, elevator and fishing segments.

3:11 The U. S. And Europe both had strong quarters. In The U. S, growth came mainly from elevator and mining segments, while in Europe, we saw good traction across oil and offshore renewables and value added services. Now coming to the Middle East operations, volumes were down approximately 28% due to continued geopolitical and market disruption. However, realizations improved by approximately 36% on the back of better pricing and a more favorable mix, which allowed us to hold revenues broadly at last year's levels. Even in a challenging market, the strength of our portfolio protected our business. Now turning to Wires.

3:58 The business delivered healthy growth during the quarter with volumes up approximately 19% and revenue growing around 32% year on year. The wire portfolio today is largely domestic driven and exports represent a significant growth opportunity for us. We've already begun supplying to select European customers in high value applications such as automotive and rockfall protection, and we see considerable headroom to scale this as we secure further approvals and deepen our coverage in these markets. On Plasticated LRPC, the business continued to gain traction, supported by healthy demand, both in the domestic and export market.

4:44 A key milestone this quarter was our first international order for icated LRPC strand for a stay cable application. This is an important step. As further approvals mature, it opens up meaningful opportunities to expand internationally. This will be central to how we compete in the LRPC segment where black LRPC has become largely commoditized, while plasticated offers genuine differentiation and better value. Coming to Ocean Fiber. Ocean Fiber continued to build momentum. While it remains a small part of the overall business, we are encouraged by the progress across offshore and heavy lifting applications and the pipeline of opportunities ahead.

5:31 This segment complements our core product portfolio, and we see it as an important growth lever for the company going forward. Overall, I would like to highlight four broader points from the quarter. First, the improvement in performance reflects our shift towards high value products and applications. Over the past few years, we have made sustained investments in strengthening our manufacturing and R and D capabilities, enabling us to address technically demanding applications across global markets. Many of these products require extensive development, testing and customer qualification, creating meaningful barriers to entry. Our growing track record of approvals and successful FEED performance validates this strategy with the benefits increasingly visible this quarter across our growth portfolio, value added buyers, Plasticated LRPC and Ocean Fiber.

6:28 Second, we were able to protect profitability and expand margins despite a significant increase in key input and logistics costs. Wire rod prices were approximately 7% higher year on year, while zinc prices increased by around 28%. Freight costs also remain elevated. We implemented pricing actions across segments to pass through these increases. Together with improvement in product mix, cost discipline and operating efficiencies, this enabled us to expand EBITDA margins to 20.1%. Third, profitability translated directly into cash. We generated operating cash flow of approximately INR242 crores, representing cash conversion of 116% of operating EBITDA and closed the quarter with a net cash position of approximately INR $4.65 crores.

7:28 Fourth, this balance sheet strength allows us to keep investing confidently in the future growth. During the quarter, we incurred capital expenditure of approximately INR 73 crores. For FY 2027, we continue to expect CapEx of approximately INR $2.50 crores to INR 300 crores. These investments are focused on expanding capacity in specialized wire rope and improving manufacturing efficiency. A key project underway is the expansion of our elevator rope capacity by approximately 6,000 metric tonnes per annum. The additional capacity is expected to be commissioned in phases beginning October with the project scheduled for completion by the first quarter of FY twenty twenty eight.

8:16 Looking ahead, wire rope volumes remain a clear priority, and our approach will be value led volume growth. We will also continue to improve mix, scale our newer verticals and strengthen collaboration across our global operations through the One Usha Martin initiative. While the external environment remains dynamic, demand across our key applications remains healthy. With our differentiated portfolio, long standing customer relationships and strong balance sheet, we are confident of delivering consistent and profitable growth. With that, I would now like to invite our CFO, Mr. Abhijit Paul, to take you through the financial performance for the quarter in greater detail. Thank you.

9:03 Thank you, and a very good afternoon to very good morning to everyone. I will now provide a brief overview of the company's financial performance for the quarter ended 06/30/2026. During Q1 FY 'twenty seven, our consolidated revenue from operations stood at INR $10.33 crores from INR $8.84 crore, registering a healthy growth of 16.4% year on year. During the same period, our operating EBITDA grew to INR $20.08 crore from INR 145 crore, a growth of 44% year on year. This demonstrates that our profitability growth has been driven by a richer product mix, effective cost recovery and strong operating leverage, enabling a significant expansion in earnings.

9:57 This is visible from our EBITDA margin as well, which improved to 20.1%, a three eighty basis point increase year on year. Profit after tax for the quarter grew to INR 142 crore from INR 101 crore, registering a growth of 41% year on year. From a segmental perspective, the wire rope business recorded revenue growth of 18% year on year, while the wire and strength segment grew 31.7% year on year. The LRBG segment reported a marginal growth of 3.9 year on year. Within wire rope, the value added group component stood at 73% compared to 70% in FY 'twenty six.

10:44 This has enabled us to achieve an EBITDA per tonne of INR 40,581. As highlighted earlier, our focus on improving product mix, increasing the share of specialized products and maintaining effective cost management continued to support profitability during the quarter. Our ability to pass on higher output, higher input and freight cost further enabled us to maintain healthy margins. Cash generation remained healthy during the quarter. Our operating cash flow before tax stood at INR $2.42 crore, translating into a cash conversion of approximately 116% operating EBITDA. After funding CapEx of INR 73 crore, free cash flow stood at INR 135 crore.

11:34 Continued focus on working capital management further strengthened our financial flexibility and ability to invest in our growth priorities. Our return on capital employed improved to 21.4% from 20.6% as of March 26. I'm also pleased to share that during the quarter, the company's long term credit rating was upgraded by India Ratings and Research to INDAA minus from IND A plus with a stable up. This upgrade reflects the continued strengthening of our financial profile, healthy cash generation and prudent capital allocation over the past few years. As we move forward, we will remain focused on maintaining healthy cash conversion, improving working capital efficiency and deploying capital selectively towards opportunities that enhance returns and support long term growth.

12:34 To conclude, we made a strong start to FY 'twenty seven with healthy revenue growth, margin expansion and robust cash generation. Our stronger balance sheet and improved credit profile provide us with financial flexibility to pursue our growth plans while maintaining capital discipline. We remain committed to delivering profitable growth and creating long term value for our stakeholders. This brings me to the end of my remarks. I would now request the operator to open the line open the floor for question and answer session. Thank you. Thank you so much, sir. Ladies and gentlemen, we'll begin with the question and answer session Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are request to use handsets while asking a question.

13:30 Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of Aman Kumar Swantala with AK Securities. Please go ahead. Yeah. Good morning, everybody. Sir, first of all, congratulations to Saiya to become a part of Board of Director. And because of the effort of Rajiv sir and you, Under the leadership of both of you, the company has done excellently in this challenging global environment.

14:20 And for the first time, the company has achieved a turnover of 1,000 crore rupees quarterly. This is again a very big achievement seeing the challenges geopolitically. So I have a few questions regarding the quarterly results. Question one is, sir, how has the wire loop performed in terms of volume compared with both the previous quarter and the corresponding quarter last year? Could you also share your outlook for volume growth over the coming quarters? And one more thing I want to add that how much volume loss we have incurred due to this Middle East crisis? Thank you, Amanji, for your question.

15:11 Robe volumes were marginally lower this quarter, and there were essentially two factors behind it. Firstly, as we mentioned in the opening remarks as well, volumes came in lower in The Middle East, where volumes declined around 28% due to the ongoing geopolitical conflict. The port, marine and offshore and construction business have all been affected in this region. Projects across Saudi Arabia have been delayed or stalled. The distributors in this region have also taken a conservative approach to stocking. All of these actually have led to a lower demand in this region. Our focus in this region was to maximize inquiry conversions sent through our value addition route and optimize product mix as much as possible to reduce overall impact on the top line and bottom line.

16:11 The second factor was the Asia Pacific region, where we saw some project related delays during the quarter. Now these are delays rather than any lost demand. The projects are still under negotiation and in the pipeline, but they will mature in this quarter. At the same time, to reduce our dependence on project driven business, we have stepped up our customer engagement in the region and identified areas such as crane ropes and elevator, there we'll see a clear headroom to build a more regular business to get regular volumes. This will be a key focus area for us through the year. Also in our other key geographies, Americas, Europe and India, we saw volume and value growth during the quarter, and we expect the positive momentum to continue in the year as well.

17:10 You. Sir, next question, although the situation in The Middle East remains uncertain in the near term, if the geopolitical situation improves and reconstruction activities, how significant could be the opportunity for Usha Martin? And which of our products are best positioned to benefit from such a scenario? Hello? Yeah. Yeah. Yeah. Can you hear me? Yeah. Yeah. Yeah. We can. Yes. So, yeah, just to... I'll just start again. You're absolutely right. Yes, The Middle East would represent a meaningful opportunity if and when these geopolitical conditions improve, and the opportunity would be across the portfolio.

18:13 The sectors that we cater to, for example, in the construction and the infrastructure side, when the reconstruction starts, this would support the demand for our crane ropes, particularly the piling applications. Also growth for elevator ropes as well would increase. Secondly, in if the investments in ports and logistics infrastructure happens, which we expect once the situation gets better, that should also create demand for port cranes for marine applications and even for our GP ropes as well. Thirdly, this region is also an important market, of course, for the oil and offshore. So that too should pick up and support the demand for our large diameter ropes as well as for our drill line ropes.

19:01 And then, you know, beyond the ropes side, even for some of these bridge and infrastructure projects, which are currently getting delayed due to the situation, This... Once things get better, this should create opportunities even for plasticated LRPC projects in in this market for us. And for us being, you know, present with our own factory, with our own digging shop in Saudi, this should create an important advantage to capture these opportunities. Okay. Thank you. And one last question is that, see, apart from wire rope, we are looking for three other businesses. One is Plasticated LRPC, another is Galafine wire and third is Synthetic Slim. So how this all the three businesses are done in this quarter?

19:50 And how we foresee going forward in all these three division? Yes. You're absolutely right. Again, that plasticated LRPC synthetic wires are also extremely important parts of the portfolio. And in each of these, we've made progress in the quarter. As we mentioned in the opening remarks, Plasticated LRPP saw good traction this quarter. We did record the highest volume and value for this segment this quarter. And that's also one of the reasons why we saw top line growth in the LRPC segment despite seeing a volume decline year on year. We have started supplying LRPC self plasticated LRPC to the export market as well for the stay cable applications, which is an important development. And with the upcoming approvals that we've been working on for a few years now, both the domestic and export market will open up further.

20:50 Coming to your second point on the synthetic slings, which is our Ocean Fiber brand, that is also a very important part of our BSUK business. So last year, I believe, was the first full year of commercial operations for this segment. And we can see that over the last five quarters, each quarter, the revenue has been on an upward trend when it comes to this segment. So from being a pilot project, which is what it started off at, this is now giving us consistent revenue, consistent contribution. And our goal is to see how we can take this from the 2,000,000 to 3,000,000 GDP level that it is now to say a 10,000,000 GDP level over the next few years. And being a high margin business, this will add significantly to our bottom line performance in the upcoming years as well.

21:42 And what about Galfine wise? Galfine wise. Yes. So on yeah. So on Galphine, which is, you know, under our brand name Galstar, which is our brand for aluminum zinc coated wire, that's also progressing well. We're seeing good demand in the domestic market. In the export market also, we've got approvals in place, supplying to the European market, for example. And these, again, are critical applications, right, because they're used in rockfall protection. So customer approvals are based on the performance, reliability, not just on price. So scale up takes time, but we have gotten good successes in the export market also, and our priority is now to see how we can broaden our customer base and get more approval. Approval.

22:32 Okay. Thank you. This is from my side. Thank you. Thank you. Our next question comes from the line of Rajesh Majumdar with three sixty one Capital. Please go ahead. Good morning, Rajeev, Shreya and Navajit. Actually, I wanted to ask you that if we look at the breakup of the volume numbers, wire rope segment is pretty flattish for the last three quarters. And though the realization per ton has improved steadily and has kept up the margins, the volumes have been quite static. So when can we start seeing an uptick in the volume? Because I understand that 1Q is normally a seasonally weak quarter as well. And we've seen historically 2Q has been a very high volume bump up for the wire business.

23:17 So shall we see a similar trend this year? That was the first question. So let me tell you that, as we mentioned earlier, the Middle East market is the one which is impacting in the last quarter, where we almost had 26% to 30% lower volume, which is almost 1,000 tons. So that is the business which we lost because of the current geopolitical situation. However, the other markets have done well, whether it's the domestic market or the European and The U. S. Market. So our looking at the current opportunities globally, including the domestic market, we feel that we have an opportunity to grow our we still maintain that we will be able to get to 10% to 12% growth of volume in this financial year. Now that the capacities are already in place, the and the inquiries are fairly strong, we should be able to get to our 10% to 12% growth in terms of volume for the whole year as we had indicated earlier.

24:39 That means we'll have like double digit growth for the balance part of the year because the first quarter is nearly flattish in terms of the volume number. But also, I would like to state at this point of time that while 10% to 12% volume growth is something which we are quite hopeful and we should be able to achieve, barring these situations happening globally. But at the same time, as we have mentioned even in the past, our focus has to be both on volume and value because wire rope, there is it takes time for us to get all the approvals and get into these specialty customers and get consistent in regular business from them. So a lot of progress has taken place on that.

25:27 The capacity is available with us. As these inquiries and orders mature, we should be in a position to push these volumes. Okay. And sir, if you look at the realization per ton, there's a sharp jump in LRPC, which is, of course, understandable. But then subsequently, at the end of June, we've seen a huge drop in the LRPC prices as well. So will that impact how much of the margin impact is there from LRPC this quarter? And will that be negatively impacting next quarter? If so, will there be some positive impact coming from the cost side on the wire rope and the other businesses to negate that impact? Yes, sir. You see margins, as we have maintained that we don't look at margins per ton. Of course, it's a derived number, which we got a healthy number of 40,000.

26:23 But our focus, as we have maintained earlier also, is to keep to at least maintain a base of 20% now based on all the various initiatives which the company has taken over a period of time. And we hope that even going forward, we'll have a minimum base of 20%. We were able to pass on all the cost increase, whether it was for the steel, as Shreya mentioned in the opening remarks, For steel as well as the gas and other inputs increase, we were able to pass it on to the customers. Yes, and that also helped us to ensure that the sustainability of margin was there. Going forward, I think our base, as we have been maintaining, would be at 20%. And as these various new CapEx volumes go up as well as the product mix improves, we should be able to see it moving upwards. So that's we are fairly positive that the new base would be at around 20, minimum of 20%.

27:32 Okay. And sir, what would you guide for CapEx for the next two years for our business, Rasvish? You see, as we mentioned even earlier, this year, we are investing about INR $2.50 crores to INR 300 crores. And one of the main project is increasing the capacity of elevator rope by almost 6,000 tonnes a year. So that is under and also modernizing and expanding our furnaces to be able to meet the increased demand. So as we guided earlier, about INR $2.50 crores to INR 300 crores would be the CapEx, including routine CapEx or the maintenance CapEx on a yearly basis for us to be able to continue with the growth of top line growth of 10% to 12% in terms of volume and around 15% on value. So about INR $2.50 crores to INR 300 crores a year.

28:30 Our next question comes from the line of Varunjan with Balad Capital. Please go ahead. Yes. Hi. Good morning, sir. So I have a couple of questions. So one is that Ocean Fiber became cash flow positive in its first year of operation. What is the total TAM which is here, and what is the margin here? I I know it's higher than 20% higher than your blended, but what are the margin profile? And why is the margin so high? Like, is there a IP advantage versus other synthetic sling manufacturers or what? Yes. Thanks for your question. So the total addressable market for this would be about 1,500,000,000 to $2,000,000,000 is what we've estimated.

29:18 So it's smaller than the overall size, of course, of the rope market considerably, but it's growing at high double digit rate. The margins, the gross margins for this are 65% to 70%. So as you rightly mentioned, they are considerably high. And this, again, is a specialized product. It is a critical application. Again, it's used in oil and offshore, in wind energy where, you know, in a lot of cases where, you know, steel wire ropes cannot be used because the components of either the oil platform or the wind platform are more delicate and sensitive, that is when these are used. So these are heavy lifting applications.

30:06 A single last quarter, we executed an order where the weight was only six tons of a particular synthetic sling, but the... You can... The the lifting, the minimum breaking load, the lifting capacity is, you know, more than 4,500 tons. So so that is, you know, the nature of the product. It is a highly specialized, again, critical application where you need approvals and you need track record to build the business. So, again, very much in line with our approach to having more value added products in our portfolio, you know, this also fits well within that. Okay, ma'am. And this plasticated LRPC in the q four call, management had indicated that some approvals were expected within weeks. So have those... All those approvals come and will FY twenty seven volumes for this reach, like, 6,010 tons which was guided, or will it be higher?

31:07 So for Classification LRPC, yes, there was one major approval with one of the customers in the domestic it's a global customer, but they have high share in the domestic market. Verbally, we have gotten confirmation on that, but some paperwork is still getting a little bit delayed. But, you know, it is all progressing well, it's it's it's in place, and the the the party has already started quoting with our product in the market. So we still remain confident of that. In terms of the volumes, yes, we do have a capacity annually of 6,000 tonnes. Last year, we did close to 2,500 tonnes. This year, our target is 3,500 to 4,000 tonnes. And then next year, we should be able to fully utilize the capacity as these approvals come through and with our traction that we're already seeing in the international market, we're still confident of these numbers.

32:07 And then because this is an area where we have all of the capacity in place for the front end and only the classification line is the additional CapEx, we are already thinking about how we can further ahead of time increase our capacity so that in eighteen twenty four months' time, as these projects pick up, we are still able to, you know, meet the the demands of the market. Got it. Got it. And, ma'am, management always say that there is a 85% replacement market exposure. So what are... What is the replacement cycle for, say, mining, elevator, you know, oil, offshore, and how is it different? Like, which has longer and which has lower? And and how sensitive are these replacement cycles to lower utilization?

32:55 So say if the business is disrupted in Middle East, so then the replacement cycle elongates or the replacement cycle stays the same? Good question. So, yes, you know, like you mentioned, 85% is replacement market for us across sectors. This could be different. So, for example, for certain mining ropes, you know, which are, for example, certain applications like dump ropes in in in in mines, it can be as little as one to two weeks of replacement. But then across elevator ropes, it could... You know, it is longer. It can be five to eight years depending on whether it's a commercial elevator or extension led elevator and how much it is used as well. So... And and then, you know, porch is somewhere in the middle between six...

33:43 Can be between six to twelve months. So every application has sort of a different cycle. Now coming to your question on The Middle East. Right now, the situation in The Middle East is that, you know, a lot of the ports are not even functional. So they are not being used. So to that extent, the replacement cycle might get delayed a bit, but I I just want to highlight that these are safety mandated replacements. So it's not that, you know, a rope breaks and then you replace it. There is a certain timeline based on usage that the various sectors they have in mind, and then they have to that they are not have in mind that they are mandated to replace it in, and that's how the replacement happens. So we have fairly good idea in terms of predictability of volumes for this replacement demand.

34:33 Got it, ma'am. That's very helpful. And just one last question, if I can sneak in. So Usha Martin U. S. Market share is slightly below 5% and Europe is like close to 10 to 12%. So over the next three to five years, where do you see the market share in these geographies? And also in India, what is the present market share, and where do you see it in the next three, five years? So starting with The US. So US, yes, our market share is sub 5% right now. And if we look at today as a percentage of our total portfolio, about nine to 10% of our revenue comes from US or broadly the Americas region. This is definitely an underpenetrated market for us relative to the overall size. So we do see this as an important expansion opportunity for us going forward, especially in certain value added segments like elevators, mining, and oil and gas also is an area that we are focusing now. So definitely, US is one of the important markets for us.

35:39 Europe Europe, of course, having our own rigging shops, our own service centers, and having our own manufacturing as well gives us a big advantage. So that is a a big market for us. After India, actually, that is our largest market. So about 27% of our top line in this quarter came from the European market. In Europe, our strategy going forward will also be that we have a presence in UK, we have a presence in Netherlands. So those are well established markets. But going forward, we still see headroom in markets like Germany, Italy, Denmark, Norway around the North Sea area. Here, our share is relatively smaller right now. So we see an opportunity to grow. So we will not see Europe as a whole, but we are looking at each of these geographies to see where we can gain share.

36:33 And lastly, you asked about the India market. So of course, domestic market is very important for us, 65% to 70% market share we do have in the domestic market. But again, the way we look at it is segment wise. So we talked about elevator road, where we do have about, I would say, percent to 65% market share. And there is a lot of room to grow. But right now, actually, our biggest constraint is capacity. The elevator market in India is growing at about 20%. All the major OEMs are setting up presence here. So once the additional capacity comes in, we think that we can grow not only as the market grows, but also take more share, which we are not able to cater to right now.

37:21 Other segments in India, we're looking at ports is another important segment here. We do have already 95% more than 95% market share in India. So more focus is on retaining this market share. And also as the market grows, there's a lot of port expansion that is happening in India. So that is another area where we're actively working. And having already credibility with having most of the shares, I think this will keep growing as the market grows. And other high value sectors, piling, mining, of course, domestic market in all segments, have a strong dealer network. So through them, we cater to most of the segments. Got it, ma'am.

38:06 Got it, ma'am. Thank you. Thank you, and all the very best. Thank you. Thank you. Our next question comes from the line of Puneet Thakur with Plus91AMC. Please go ahead. Hi. Good morning. Thank you for the opportunity, ma'am. I had a couple of questions. Could you just help me understand what your sustainable EBITDA margins going forward? Because we have seen quite a good Q o Q and AOI growth in those margins. And what will be a sustainable margin going ahead? You see, as I mentioned, margins were moderated slightly on a sequential basis. As we had mentioned that there could be a quarter on quarter variation in terms of margin in the 20% to 21% range due to the product segment and also in the geographic mix where we are selling our products.

39:04 Our goal would be to maintain margins upward of 20% with focus to more whereas the focus on both absolute top line and bottom line growth. So I would say the minimum would be 20%. And as these various initiatives come up have come up, we expect it to move upwards. But again, this would be depending on how the overall global situation evolves. But we are reasonably confident that we should be now having a new base of 20% and gradually moving upwards. Then, coming to the volume, what would be our volume growth going forward as well?

39:50 And what is the utilization of our consolidated plans going currently? You see, as I mentioned earlier in my one of the answers that the target is to increase our we still are reasonably confident to get to 10% to 12% volume growth this year and a value growth of 15%, depending on the product mix, of course. And that is something which we are reasonably confident even now to achieve this in the current year. And with the various CapEx programs, which we have in hand and the new capacities, which have already been added and would be added, we expect this volume growth to continue at a similar levels in the coming years as well.

40:42 But sir, if you see our current Y o Y volume, sale volume is flattish, it is flat. There has been very minimal change. So how do we achieve expect to achieve a 10% to 12% volume guidance growth going forward? You see, as I mentioned earlier, and I think Shreya also mentioned in our opening remarks that we had a 10% to 12% with The Middle East, which is a very significant market for us, and we had set up our Saudi Arabian operations over there, which had started delivering good results. So and we were expecting growth to come from that market this year. Instead of getting a growth, there is almost a 30% volume dip in that market. So these situations, one has to deal with it. And of course, we are all hoping that things will stabilize.

41:35 But on the other side, we grew by 12% in our volume in our markets in India. We grew in The U. S. In terms of volume. We grew in the European market in terms of volume. And with these new capacities, which have come in and the kind of order book and the inquiry what we have, I would say that we are hopeful of still achieving these numbers with the kind of pipeline of inquiries and orders what we have. You see, but at the same time, one has to understand that we are present in so many geographical places in different parts of the world. Sometimes a war like situation, what happened in The Middle East does impact the overall business. But otherwise, I would say that looking at the current business environment, the kind of order books and kind of inquiry, we are reasonably confident to achieve that. Sir, what I'm trying to what I understand is that so you think 10% to 12% would be inclusive of the Middle East operations resuming or excluding those operations?

42:42 Hopefully, yes, I think it would be including the Middle East, what we are seeing today, unless it goes from into a worse situation from here now. But if it is even at similar level, we should be able to do that. Okay, sir. And then my last question would be about realizations. What sort of realizations are we looking at for all the product mix that we have for this quarter? If you could help me. The current realizations, have been able to pass on the entire increase of the steel and the various gases and the various other input costs, which have been increased. So and partly, it has reflected in the partly, it has reflected in the quarter one results.

43:32 And hopefully, we should be able to maintain this increase even in the coming quarters. So realization should be on the however, on the LRPC side, we are seeing a slight depression in terms of the realizations because of the ongoing monsoon and the project slowdown in The States. But otherwise, overall, we see a healthy in terms of wire and wire ropes, we see that we will be able to maintain a healthy realization of our products, slightly better than what we did in the quarter one. Sir, could you give me the quantum number for the realizations from the products that we have or the or blended realization what we have achieved this quarter?

44:26 Can you come again? Yes. I was asking for the quantum number of the realization. Yeah. So for wires, it would be around the 85,000 rupees per ton range, the realization. For LRPC, because the large part was also classicated LRPC this time, The blended margin for black and classicated together was about 79,000 rupees per ton. And rope in the domestic market was around 1 lakh 90,000 rupees per ton. And internationally, we saw with more growth in Europe and The U. S. And value added services, the realizations were one of the highest we've seen around INR 370,000, INR 380,000 per tonne.

45:15 So ma'am, the INR 370,000 and 380,000, these are like a sustainable margin? Is it just due to the war or there's an increase in the realization? Are depending on the product mix. See, we are selling products of OceanMax, which are sold at a different price. Then there are GP ropes in the international, which are at a different price. Drill line ropes are sold at a different price. And these also depend on quarter by quarter. So what Shay mentioned that those are the numbers which we are targeting, and hopefully, we should be able to do. But that also depends on maturity of some of these orders, what we get in a particular quarter and how the mix is. But in general, and because we operate in so many geographies, so many product mix, so it's difficult to say that what exact number would be. But it would be what Shreya mentioned in a range, which she mentioned that we would be around that range.

46:17 Okay, sir. And so just to get an overview of the industry itself as of right now due to West Asia crisis and everything else, what are your views about how it is impacting your business? And would it be detrimental in the long run or will it be beneficial for you? West Asia crisis is already impacting our top line as of now. But assuming that this West Asia crisis is resolved, we'll create a big opportunity in terms of certain demand coming up for reconstruction for the various activities of oil, gas will improve in that market. And also the reconstruction activities may happen. So but of course, it's all very uncertain as all of us, we know that daily things are changing.

47:07 And if things do improve, it should definitely have a positive impact on our business going forward. And sir, what's our current market share in India, if you could just shed some light? We don't look at the market share of individual markets on that basis. But I think our as a part of our top line, we are about 9% of our revenue comes from the of our revenue comes from The Middle East. Our next question comes from the line of Shiv Kumar Prajapati with Miraiya Setter. Please go ahead.

47:53 Yes. Hi. Thanks for the opportunity. So my first question would be, is there any new customer addition to our list and if any of our products are nearing the approval process and what kind of contribution we can expect from profitability as well as from top line perspective for the next four to six quarters? You see, these are continuous we have a continuous line we have a continuous pipeline of new customer approvals, which is on an ongoing basis for all our various plants, be it in the elevator, be it in the oil offshore, be it in the grain industry. So and as these are all products, which take six sometimes to get the approval could be a few quarters or even two to three years.

48:48 So there is an ongoing approval process, be it for our plasticated LRPC, be it for our zinc aluminum, which is our GaLstar wires, even for our ocean fiber business. So it's a continuous process. And I'm happy to say that we every quarter, we are getting new approvals or new customers, which we are targeting with the help of our global development center, global design center. And I would say that and we prefer not to talk about the name of these customers because we have a confidentiality agreement with them also not to share the numbers. But I can tell you that on an average, at least 10 to 12 new customers, we keep on adding every few months, so across the various segments.

49:39 So there is a very healthy pipeline of these customer approvals and new customer, which we are targeting. Got it, sir. And my next question is on the CUM cables, Usha Martin cables. So that division is not doing well as plus the Thailand segment is also path negative. So is there any turnaround or any new strategy in order to make these segments profitable going ahead? As far as U. N. Cable is concerned, this is not part of our core business. Of course, we are running it, trying to run it with because that's a business which is not core, and we do not have any major strength in that business.

50:27 So we are looking at opportunities of how to use our debt facility, which is strategically located in West India, Western Part Of India, where the company does not have any other facility to see that is there any opportunity, which we can and we are evaluating few opportunities where we could use that facility to grow our value added wire and wire rope business. So that is definitely one of the options in front of us. Coming to but long term, on the cable side, we don't see that as a business which we would like to be in. Coming to the business of Thailand. It's a strategically located plant, a very important plant, having very strong customer base in that region in the ASEAN region and one of the leading players in Thailand.

51:19 Of course, we the margins in the previous quarter, first quarter has improved, and the outlook for the current year is better in Thailand in terms of the order book and all. But we are looking at we are looking at a strategic model, how Thailand can become more profitable, would be able to get better realizations and better margin by enhancing the product mix. And I would say in the next six months, we would be in a position to have a fairly well, well evolved plan for this, which should create a long term improved profitability coming from our Thailand plant. One of the options we are even looking at, how do we integrate it better with our plant in India, similar to what we have in Dubai and similar to what we have in The U. K.

52:14 And see that how we can get the synergy benefits and help improve the profitability. So that is something. It's a good question. Both of these are in top of our mind, we would be addressing it in the coming two or three quarters. Sure, sir. And sir, next is on the C band. So currently, we have very negligible impact. But post FY 'twenty eight, we might see some impact on our products or say the region to which we cater. So what kind of headwinds or issues we can see post FY 'twenty eight? And what sort of mitigation strategy are we adopting today? Yes. That's a good question. So of course, that's top of our mind as well.

53:07 As of now, in the definitive period, we are only exposed to one product segment, which is wires, which comes under 7,002 and 17. So we do export that to Europe as well. So that is already under the definitive period under C band right now. So what we're doing is we are working we've appointed a consultant. We are working with them to understand what would be the cost impact per ton of that, and we are regularly communicating with our customers as well on that to see what strategy we can have jointly. In terms of the wire rope, which comes under 7,003 and 12, that is not in the definitive period right now because, of course, that is a more complex derivative of steel that will come, like you said, in FY 'twenty eight.

53:59 But through the exercise for wires right now, we're also trying to understand what the cost impact per tonne would be for wire rope. It would not be that much more because it is just like value addition beyond wires from an energy consumption perspective, large part of the cost is because of the impact of the input cost for us, the input material for our steel. From our processes, it is negligible for the emissions compared to what it is for the input material. So we are working with our suppliers as well to see what are the options available to us so that we can minimize that overall impact when it hits us in FY 'twenty eight.

54:48 Got it. A couple of questions. So last quarter, you highlighted that we are facing some fuel challenges, like fuel costs are increasing. Somehow, we are able to manage it well so far. But given this West Asia Crisis, I mean, it is not yet stable that we desire. So going ahead into second half, can we see any impact on our operating profitability? It's a good question. We as we mentioned, we have been able to pass on the increase, whatever has taken place into the market.

55:35 And of course, the West Asia crisis has brought in volatility in the oil and gas prices globally. But we have been able to successfully pass it on to the customers. And very transparently, we talk to our customers. And hopefully, we are in a position to pass it on in the future, and we don't see any impact coming on that account to our business. Great, sir. And last question, referring to the annual report '26 on lighter note, I see a jump of 4x in Mr. Rajiv's remuneration. So any comments you would like to add?

56:23 Yes. Just let me it's not ForEx, if you look at it because year before last, when we were going for a major restructuring for our business in our group, whether it's the European business and major cost initiatives, which we have taken, I had foregone my bonus for the year 'twenty four, 'twenty five. So that was for one particular year, I had taken a view that because we had taken some very serious austerity measures across the company. So that was an approximate value was approximately INR 8 crores, which was applicable. But on my own, I decided to forego it. So to that extent, it's an anomaly for a particular year, if you look at it.

57:21 Thank you. Our next question comes from the line of Shweta Kapadia with SMIFS Limited. Please go ahead. Am I audible? Yes, please. Yes. Yes. Thank you for the opportunity. So first, I would like to congratulate the team for good set of numbers. And my first question is, sir, if we take a look, the steel prices have increased mainly included during the quarter at around 13% q o q, but the EBITDA per ton has improved by only approximately 3% q o q. Additionally, the EBITDA margins contracted sequentially despite all lower contributions from the classificated HRT business.

58:06 So if you could just help us understand the key factors which limited the EBITDA per metric expansion. So is it because of the timing mismatch in the raw material pass through or the product mix change or the cost headwind? So as you can... You know, as you said, the EBITDA per ton was at 40,000 per ton level. Even after the input costs increased, we were able to sort of pass on the input costs and then further still improve our product mix as well as manage our costs on a year on year basis to get these overall margins. When it comes to the sequential decline in the margin percentage, like we said, quarter on quarter, even seasonality of Q4 versus Q1, there can be a certain difference in the geographic as well as the product mix. So I would not say that quarter on quarter it cannot change. It will vary to some extent. But as we mentioned that the goal would be to get to have a minimum of 20% EBITDA margins. And as the product mix further improves, that should only get better.

59:29 So basic question the basic question is that the steel prices have increased by approximately 13% Q o Q, but our margin per ton basis has increased by 3% Q o Q. So any major reason for that? Basically, you see, in the business, the steel price has gone up by INR 7,000 per ton. So our finished product, we have been able to recover that steel price increase. So you cannot make the price of steel is INR 50,000 a ton or say INR 55,000 a ton. So 13% increase of steel price amounts to INR 7,000.

1:00:16 But wire rope is sold at INR 180,000 to INR 350,000. So you cannot take the percentage of steel price increase of 13% to increase the price of your finished product by 13% of the wire rope, which is sold. So basically, when we talk to customers, we are saying that this so it is the percentage of steel absolute steel increase, which we are able to pass on. So the margins don't increase. You cannot increase the steel price of the 7% steel price increase. So we must have a 13% steel price increase, so we must get 13% on wire rope. It doesn't work that in any of the products. It's the basic input price, which we are able to recover it.

1:01:06 Okay. Okay. Okay. Also sir, would it be possible to just give a basic understanding as to how much of the increase which we get from the realization is from the commodity pass through or due to the richer product mix? Just the percentage would yes, sure. No, no. We look at percentage. It is the absolute number of steel price. So whatever the steel price increase had taken place, we pass on 100% in the commodity product. There is no absorption of any cost. So it is a 100% pass through, whether it is wires or LRPC. In terms of the wire rope, it is purely the steel price increase and the gas and other inputs what increase, we are able to recover from the customer.

1:02:01 So commodity is 100% pass Okay. Okay. That was quite helpful. Sure. Thank you. Thank you. Thank you. This is the last question, ladies and gentlemen, for today. I now hand the conference over to the management for the closing comments. Thank you. And over to your team. Like I now to thank everyone for attending this call and showing interest in Usha Martin Limited. I hope we have been able to answer all your questions. The company is dedicated to creating value for all its stakeholders in a sustainable manner. Should you need any further clarification or would you like to know more about the company, please feel free to reach out to us or to CDR India.

1:02:49 Thank you once again for taking the time to join us on this call, and see you all in the next quarter. Thank you, ma'am. Ladies and gentlemen, on behalf of Usha Martin Limited, that concludes today's conference call. Thank you for joining us, and you may now disconnect your lines.